An experimental comparison of induced and elicited beliefs

Terrance M. Hurley, Jason F. Shogren

Research output: Contribution to journalArticlepeer-review

27 Scopus citations

Abstract

Understanding choice under risk requires knowledge of beliefs and preferences. A variety of methods have been proposed to elicit peoples' beliefs. The efficacy of alternative methods, however, has not been rigorously documented. Herein we use an experiment to test whether an induced probability can be recovered using an elicitation mechanism based on peoples' predictions about a random event. We are unable to recover the induced belief. Instead, the estimated belief is systematically biased in a way that is consistent with anecdotal evidence in the economics, psychology, and statistics literature: people seem to overestimate low and underestimate high probabilities.

Original languageEnglish (US)
Pages (from-to)169-188
Number of pages20
JournalJournal of Risk and Uncertainty
Volume30
Issue number2
DOIs
StatePublished - Mar 2005

Bibliographical note

Funding Information:
We thank David Grether for his thoughtful comments and the USDA/ERS for the financial support.

Copyright:
Copyright 2011 Elsevier B.V., All rights reserved.

Keywords

  • Beliefs
  • Elicit
  • Induce
  • Probability
  • Risk

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